US stocks and bond yields dip amid trade worries

Galtero Lara
Junio 18, 2018

China's Commerce Ministry said it planned to impose tariff measures of similar size and intensity response.

Adobe shares dropped 2.6 percent after the company projected third-quarter revenue that fell slightly below estimates. S&P 500 e-minis ESc1 were down 12.75 points, or 0.46 percent and Nasdaq 100 e-minis NQc1 were down 21.5 points, or 0.3 percent.

The two countries have held several rounds of talks since early May but have yet to result in a deal, as the United States pressures China to narrow a $375 billion trade deficit.

Attention is focused on central banks because they are in various stages of pulling away from the emergency stimulus put in place following the Great Recession.

The Federal Reserve is further along this path.

On Wednesday, it raised its benchmark rate for the fourth time in the past year and indicated two more increases may be on the way in 2018, which was more aggressive than some investors expected. It's making the moves because of the stronger economy, and that may mean something counterintuitive for the lay investor: The stronger the economy becomes, the more likely the Federal Reserve will be to raise interest rates quickly, and that would hurt stock prices.

"Stocks and the economy might go separate ways", Miskin said.

The energy sector .SPNY was the biggest percentage loser, down 2.1 percent as oil prices tumbled more than 3 percent ahead of next week's OPEC meeting. Brent crude, the worldwide standard, lost $2.50 to $73.44 per barrel. That helped drag energy in the S&P 500 down 2.1 percent for the largest loss among the 11 sectors that make up the index.

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Boeing, the single largest USA exporter to China, fell 1.9 percent, dragging the Dow lower for the fourth day in a row.

Investors are also weighing the impact of tightening monetary policy by central banks on the equities market. In Asia, South Korea's Kospi shed 0.8 percent, and the Hang Seng in Hong Kong fell 0.4 percent.

The University Of Michigan's preliminary reading of its consumers sentiment index for June rose to 99.3, above the estimated 98.5.

Treasury yields fell for a second straight day, and the yield on the 10-year Treasury sank to 2.91% from 2.94% late Thursday.

Gold dropped $29.80 to settle at $1,278.50 per ounce, silver fell 78 cents to $16.48 per ounce and copper lost 8 cents to $3.14 per pound.

Natural gas rose six cents to settle at 3.02 dollars per 1,000 cubic feet, heating oil lost seven cents to 2.09 dollars per gallon and wholesale gasoline fell seven cents to 2.02 dollars per gallon.

NXP Semiconductors rose 1.8 per cent after a media report that Beijing had already approved Qualcomm Inc's proposed US$44 billion acquisition of the chipmaker.

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